Gov’t debt stock hits record high

As the peso further weakened against the US dollar, the government’s outstanding debt hit a record high of P6.105 trillion at the end of the first 11 months, the latest Bureau of the Treasury data showed.

Economic managers nonetheless see more positive impact of a weaker peso on the export sector and on cash remittances from Filipinos living and working abroad.

In a statement, the Treasury said the government’s end-November liabilities further rose by 0.6 percent month-on-month from P6.069 trillion in October, staying above the P6-trillion mark for the third straight month.

The month-on-month increase in November, which reversed the slight drop in October, was attributed by the Treasury to “currency adjustments and net issuances of government securities.”

Year-on-year, the end-November figure was up 2.6 percent from P5.953 trillion a year ago, data showed.

Domestic debt grew 0.5 percent month-on-month to P3.939 trillion, reflecting “the net issuance of government securities amounting to P20.81 billion and weakening of peso against the US dollar that increased the peso value of onshore dollar-denominated bond amounting to P630 million,” the Treasury said.

The Treasury noted that the peso further depreciated to 49.747:$1 as of end-November from 48.485:$1 in October.

Foreign debt, meanwhile, rose 0.7 percent month-on-month to P2.166 trillion.

“For November, the growth in external obligations was significantly driven by the impact of depreciation of the peso against the US dollar (P1.262 difference from the previous month’s level) amounting to P55.99 billion. This offset the effect of third-currency depreciation against the US dollar that resulted in the reduction of the peso value of third-currency liabilities by P36.15 billion and net repayments amounting to P5.56 billion,” the Treasury explained.

The government’s total guaranteed obligations, meanwhile, declined 5.1 percent month-on-month to P532.09 billion.

“The decline in the national government’s contingent liabilities was due to the effect of net repayments on external guarantees and the depreciation of third currencies amounting to P23.51 billion and P13.66 billion, respectively. These more than offset the effect of the weaker peso amounting to P8.39 billion and net availments on domestic guarantees amounting to P220 million,” the Treasury said.

In a statement, the Cabinet-level, interagency Development Budget Coordination Committee (DBCC) said that “although a weaker peso raises the price of imported goods like electronic products, mineral fuels and transport equipment, some sectors such as exporters, overseas Filipino workers (OFWs), and the business process outsourcing (BPO) industry profit from the depreciation of the peso.”